Israeli Defense Minister Ehud Barak said Israel is prepared should a
northern front with Hezbollah open up. Barak spoke the same day Israeli
ground forces entered the Gaza Strip. While neither Hezbollah nor Israel is
overly eager for a rematch from their summer 2006 conflict just yet, one
could emerge should a more aggressive Hezbollah faction win out in an
internal debate among the Lebanese Shiite group.
Analysis

As the Israel Defense Forces (IDF) launched an expected ground incursion
into Gaza<http://www.stratfor.com/analysis/20081231_israel_palestinian_territories_gaza_ground_incursion>on
Jan. 3, Israeli Defense Minister Ehud Barak told the Israeli people in
a
live TV broadcast that Israel would have to endure a "heavy price" in this
military campaign. Barak also raised the possibility of another front
opening up, this one on Israel's northern frontier with Hezbollah in
Lebanon. Barak said, "We hope that the northern front will remain calm, but
we are prepared for any possibility."

While neither Hezbollah nor Israel is gunning for another military
confrontation in Lebanon, Barak's warning has substance. Israel is already
well-aware of Hezbollah's involvement in the current Gaza affair. According
to a source connected to Hezbollah, about 150 Hezbollah military advisers
and fighters are in Gaza City prepared to lead Hamas units against the IDF
in case the Israelis attempt to storm the city. As of now, Hezbollah appears
unsure whether Israel intends to go full force into Gaza City.

If Israel aims just to destroy Hamas' ability to launch rockets into
southern Israel, the IDF probably will not accept the heavy casualties
inherent in venturing into Gaza City, where Hezbollah-led Hamas units can
unleash a major suicide bombing
campaign<http://www.stratfor.com/geopolitical_diary/20081230_geopolitical_diary_israels_strategy_gaza>against
the invading forces. But with the IDF continuing to call up
reservists numbering in the "tens of thousands," Hezbollah and Hamas cannot
be sure that Israel does not intend to inflict greater destruction on Hamas
by attempting to uproot the group's stronghold in Gaza City.

Israel, with the help of
Egypt<http://www.stratfor.com/analysis/hamas_risky_threat_egyptian_border>,
is attempting to cut off Hamas' supply lines through this Gaza operation.
Israel already has bombed several smuggling routes and placed a naval
blockade on the Gaza coast. Meanwhile, an Egyptian security source revealed
that Egyptian intelligence officers recently arrested a Hezbollah arms
smuggling ring consisting of one Lebanese Shi'i and two Palestinians living
in Lebanon. This was one of many Hezbollah smuggling rings that travel
regularly between Sudan and Cairo and the Sinai Peninsula in Egypt. From
Sinai, Hamas has built extensive underground tunnels into Gaza to smuggle in
weapons and supplies.

According to the same source, Hezbollah purchases arms for Hamas and
Palestinian Islamic Jihad from Sudan, where the arms market is thriving. The
arms are then smuggled into Sinai with the help of sympathetic Egyptian
security officers. Once in Sinai, Hezbollah smugglers rely heavily on the
help of disgruntled Bedouins, especially the Gawarnas, who also traffic
drugs. Hezbollah rewards the Bedouins with light arms, cash and Lebanese
hashish, which the Bedouins sell in the Egyptian black market.

Iran allegedly pays the full cost of this arms procurement and of payoffs
for the Egyptian security officers and the Bedouins. The source also says
that Hamas continues to get handsome contributions from wealthy Gulf Arabs,
who prefer to donate money indirectly. Some of the Gulf Arabs transfer funds
to Hamas by giving their Palestinian employees money in the form of salary
increases and bonuses. The Palestinian laborers then transfer the funds to
Gaza, where the money ultimately finds its way to Hamas coffers.

While Hezbollah has contributed a great deal to Hamas' armor, training and
supplies, there is a debate raging inside the organization over how much
more or less Hezbollah should interfere in Hamas' fight in Gaza against the
Israelis. One faction, which includes Hezbollah chief Sheikh Hassan
Nasrallah, opposes any escalation and believes Hezbollah already is doing
all it can to assist Hamas. This faction believes Israel is waiting for
Hezbollah to provoke a fight. This would allow the IDF to respond massively
in Lebanon, giving Israel the opportunity to make up for the 2006
Israel-Hezbollah military confrontation, which gave Hezbollah a rare
symbolic victory over the Jewish state. A more hawkish faction of Hezbollah,
however, argues that an Israeli offensive against Hezbollah is inevitable,
so it is better to open a second front against Israel now — forcing the
Jewish state into a two-front war.

This debate is still playing out, but Hezbollah has heard Barak's warning:
Israel is not looking to open another front in the north while it is
battling Hamas in Gaza, but will (according to Israeli security sources)
target high-value Hezbollah targets in Lebanon if provoked. Though Hezbollah
has been preparing long and hard for a rematch with the Israelis in southern
Lebanon, it cannot be assured that it would survive a fight in which Israel
is likely to throw its full force into dismantling Hezbollah's military arm.
Just as important, Hezbollah cannot be assured of Syrian cooperation in
another fight against Israel, especially as the Syrian regime is already
pursuing complex negotiations with
Israel<http://www.stratfor.com/analysis/israel_syria_direct_talks_and_hezbollahs_demise>that
would involve Damascus turning on its militant proxies. Under these
circumstances, Hezbollah is more likely to lay low and provide more indirect
assistance to Hamas in this fight. That said, Israel is not taking any
chances, and will prepare for the possibility that the more hawkish
Hezbollah faction wins out.